Surety bonds and moral hazard in banking
نویسندگان
چکیده
We examine a policy in which owners of banks provide funds the form surety bond addition to equity capital. This would require regulator with that could be invested marketable securities. Investors bank receive income from as long is business. The capital value used by regulators pay off banks’ liabilities case failure. After paying depositors, investors remaining funds, if any. Analytically, this instrument way creating charter but, opposed Keeley (1990) and Hellman, Murdock Stiglitz (2000), restrictions on competition are not necessary generate positive rents. demonstrate requirements alone cannot prevent moral hazard problem arising deposit insurance.
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ژورنال
عنوان ژورنال: Journal of Financial Stability
سال: 2022
ISSN: ['1572-3089', '1878-0962']
DOI: https://doi.org/10.1016/j.jfs.2022.101069